Store 24 A and B
Consider three questions posed by individuals in the case:
(a) Is manager or crew tenure a driver of store-level financial performance? (b) How important is manager or crew tenure compared to other store characteristics on which information is available (location, visibility, opening hours, etc.)? (c) Is the relationship between manager or crew tenure and store performance the same at different levels of tenure? For example, does an additional year of tenure matter as much for a new manager as for a highly experienced one? To answer these questions, run regressions using the data provided in the spreadsheet file that accompanies the case. (Don’t include the Skill and Service Quality variables yet in this analysis.) Include relevant regression output (in easily readable form) along with your write-up answers to the questions above.
The relation between employee tenure and store-level financial performance that is tested in the (A) case is not expected to happen by magic – just being around for a long time is not necessarily beneficial. Employees are expected to gain skills as they gain experience, and these skills are expected to improve the quality of customer service at the store. Testing whether and when these expectations hold true can help the firm get the most out of its employee retention programs. How can you best include the employee skill and service quality measures in your analysis of the relation between employee tenure and store financial performance? What do you conclude from the resulting analysis? Include the regression output that supports your answers to the questions above.
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